Avianca Brazil has filed for bankruptcy protection with a Brazilian court in a move that comes after lessors sought to repossess some of the carrier's aircraft, two sources tell FlightGlobal.
The carrier, Brazil's fourth largest airline, had been working with lessors to reach tenable lease agreements but failed to find common ground, one person close to the proceedings says. The company leases 50 of its 58 aircraft.
Avianca Brazil did not immediately respond to requests for comment. The effect of the filing on Avianca Brazil's operation remains unknown.
Yesterday lessor Aircastle confirmed in a disclosure with the US Securities and Exchange Commission that it was moving to repossess 11 aircraft – one Airbus A330-200 and 10 A320s – on lease to Avianca Brazil.
Likewise, BOC Aviation has been named in local reports as using legal channels to take back aircraft leased to the airline. BOC declined to comment.
Following Aircastle's move, Avianca Brazil filed for judicial protection, asking a judge to block lessors from repossessing aircraft, according to the source close to the proceedings.
Avianca Brazil is awaiting a ruling from the judge, sources say.
In recent days, Avianca Brazil told FlightGlobal it would return eight aircraft to lessors. That news followed reports of legal action by lessors seeking the return of up to 13 Airbus aircraft. The carrier said it had planned the fleet reductions since August and did not specify which aircraft were included in the returns.
GECAS also has large exposure to Avianca Brazil, with one A320 and 10 new A320neos on lease with the carrier. GECAS decline to comment.